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tv   FOX Business After the Bell  FOX Business  February 22, 2013 4:00pm-5:00pm EST

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of the book. it is a dirty name. we love larry. he will join us in just a minute. took it off of there. one more shot. there you go. larry shover will be here in minute. sandra: let's go to nicole petallides at new york stock exchange. we have hewlett-packard, a huge winner in the, leading the dow. >> hewlett-packard really surprised everybody, sandra. ran away with the dow jones industrials. hewlett-packard soared on a great quarter and great outlook which surprised everybody. obviously a testment to the fairly new ceo, meg whitman. david:. also a testament to david donatelli, the executive vice president came out with the new server the size of a small book. even smaller than larry shover's book. getting bad news out of europe on the weight-loss drug. this company is behind the
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weight-loss drug. >> this particular drug was approved here back in july 2012. second time not approved in europe. concerns about side-effects. now they will have to do more cardiovascular trials to try to get this thing restored. sandra: network automation, this is, sorry, network automation company, the name of it, inflow blocks definitely caught our eye. it is soaring up three bucks. david: wow. >> when you see something up 18% they did something right. david: jcpenney to the up side. a lot of questions about retailers. jcpenney getting a 4% pop. >> they are trying to redo it. ron johnson is working hard. cutting a lot more jobs. obviously people don't want to be laid off but it may be what the company needs. [closing bell rings] sandra: the bells are ringing on wall street. the dow at 13,996, it is finishing five points above where it needed to be to finish positive on the week.
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very important there. a gain of 120 points. the s&p up. the nasdaq also higher and the russell, the big winner, david. the smaller cap stocks up more than a full percent in today's trading action. david: how days change. imagine yesterday thinking what would happen to the markets particularly hewlett-packard. a lot of action in commodities too. gold is settling at a seven-month low on hints of course the fed may be ending its bond buying program earlier than expected. the precious metal dropping 2.3% to settle at $1572.80 an ounce. oil posting a big loss, closing down 2.8% at $93.13 a barrel. sandra: i would also point out, david, that the s&p 500 closing its first down week for the year. david: by the way i want to amend that. oil was up a tick today, but it was down for the week. that's what we're talking about for the week, a 2.8% loss for the week.
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sandra: the buzz over online gaming in negative as well as new jersey. casino stocks getting quite the boost. las vegas sands. citigroup put on the big buy list for global stocks. they are all posting pretty decent gains. melco. david: the dow is up triple digits but materials was the worst-performing sector of the week. freeport-mcmoran, one of those sectors biggest names, in fact we have somebody that will be recommending that stock, it was ending the week down more than 7%. maybe you buy low. mining giant rio tinto posting a big loss, closing the week down nearly 8%. sandra: ouch. hp just announced a new server technology called project moon shoot. today as nicole pointed out, the stock taking a moon shot to better than expected guidance on the current quarter. coming up the executive vice president of hp's enterprise
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group, he will be joining us. fund out how they plan to strengthen their server, storage and networking business. remember, david, it is not all about the pcs when it comes to hewlett-packard. david: he has incredible projects including the moon shoot we'll be talking to him about. also the big tech hoard. americans are sitting on billions of dollars worth of old gadgets. 9 billion in iphones alone. old ones they're not using stuffed in a draw someplace. what would happen if they flooded the market? would that actually hurt apple? coming up ceo and cofounder of gazelle. his site pays people00 of dollars for their unused tech items like iphones. find out how the market is doing and where the old gadgets actually end up. sandra: iphone might be worth some money. we'll tell you what drove the markets today, with today's data download. stocks rallying but not enough to recover from earlier losses this week. at least for the s&p 500,
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snapping seven straight weeks of gains. its longest winning streak in more than two years. the russell 2000 also closing the week in the red despite today's big gain, ending its longest winning streak in nearly ten years. the materials the worst performing s&p sector closing the week down more than 3%. the euro currency falling to a six-week low against the u.s. dollar on concerns over the strength of europe's financial system. the euro fell to an intraday low of 131.44. this after the european central bank announced crisis loan repayment by banks fell short of expectations. lots of actions in the medical -- metals pits this week. gosh, gold, silver. silver and copper both ending the week lower. silver closing down nearly 5% while copper posted a 5 1/2% drop, david. david: we have got it all covered. we have daniel in the pits of the cme.
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our market panel, larry shover who we usually see in the cme is in new york. and steven sachs, proshares head of capital markets. i want to start with daniel, at the cme. danny, amazing turn around when you think what happened yesterday. how much of that was dependent upon what happened with hewlett-packard? i mean did people look at hewlett-packard as a pace seter here in today's market? >> no, absolutely no.. this is all about the fed and bullard coming out saying they're not going to pare back as quickly as some people thought, definitely sent this thing up. just as yesterday when they said they were worried about them pulling the punchbowl away, it made it come off a bit. that is going to be what we have to focus on along with the sequestraaion issue. today it is all fed. david: it is usually always the fed, isn't it? sandra: dan, we'll not be able to rest this easy this weekend because of course we've got the big elections happening over in europe. the italian elections. this could definitely play a big part when trading resumes on sunday night.
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>> it most certainly can. you know i don't know that it will have a big effect or, should have a big effect on one way or the other but psychologically it will be, a kind of a thorn in our side if you see a massive change in italy. so that, i'm surprised we came out as strong as we did today, going into news out of italy. david: daniel, i want to ask about gasoline prices before we get you -- let you go. we'll come back when s&p closes. but how much of a drag that putting into the economy and market as well? >> at this point not so much, because it is early on. as long as the ga hangs around $4, that is where we're at in chicago land area, 3.80 in the country, the more it stays up the more of a drag it will put on there i don't know the exact correlation when you see gas prices at $4, the equities pull back. david: we'll check in with you a few minutes when the s&p futures close. >> thank you. sandra: thanks, dan. let's bring in our market panel. harry shover joining us in
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studio for a change and steven sachs. larry, you saw the dow finishing positive for the week but the s&p snapping a seven-week winning streak. are you in the camp that we may be in for a correction here in the stock market? >> yeah, sandra, i do believe it is well overdue we'll have a correction. the bigger story remains in place. valuations are good. the economy is trudging along. i do believe we'll see 1550 in the s&p by the end of the year but we have gone up too far and too fast and we are overdue for a correction. david: but, steven, on the other time, every time you sense that we're in for a pullback like the end of yesterday's trading session you get a push back up like today. it is always this pullback and then, a strong push up again. usually on comments by the fed. is that going to continue? >> you know i think that --. david: hold on a second, larry. that is for steven. >> i'm right next to you. >> sorry. david, i think so.
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the pattern we've seen really for the better part of 18 months in the equity side of the equation just that. we had corrections. they have been fairly shallow. the most significant one is probably 6% area. just like we've seen this week, we're 2% off the highs in the s&p and sentiment on the street, particularly in institutional trading community i talk to a lot, really money is on the sidelines. any pullback we get money is put to work quickly and the pullbacks are typically very shallow. so it feels like it will continue. sandra: guys, you think you need to focus on the positive here. you can say we're in for a correction all day long or you don't feel good about how far we come so fast but, larry, can you give me someplace we can look in the markets to play our money? people are on the sidelines in 2012. they're in it now. where, what kind of stocks do you like right now? >> right now the best thing to do is wait. slow and steady inches with the race. sometimes not losing money is making money. so i would wait. i wait for the pullback. 1450, in the s&p 500.
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a good place to get in. however, i do like financials and the materials. i would get into jpmorgan, wells fargo. freeport and owens corning. these are great things and gives you broad exposure to the housing recovery that we'll continue to see and also the, the great story in asia, ex-japan with continued urbanization. i think it is a great time to continue to get into those stocks however i would wait and get my shopping basket out waiting for a pullback. david: larry, i want to challenge you on one of those, freeport-mcmoran. you have silver and gold. a lot of people say gold will go down much further than what it is now. you have both goldman sachs and eric bolling say it will go down to 1200, 1200 an ounce. don't you want to wait until you go down further before you get in there. >> i love eric bolling and basically others is basically old story. the gold is trading well above its cost structure.
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it needs to go to $1200 an ounce but there's another story. we're in the middle of a experiment with monetary policy we never every seen throughout the whole world. there is race to the bottom. i can't imagine that gold won't stablize at some point with central backed buying. we have the india story. the supply is good however when the supply starts to run out you will start seeing indian demand again. you will see some support and gold should rally from that point. sandra: david, you sort of have an idea that europe is good place to play your money right now despite the fact contraction is still expected over there. kind of in line with what we talked about with citigroup today. they're saying look at big international companies with exposure outside the united states. is that sort of the play you're looking at? >> it really is. if you look at it first and foremost, probably one of the better ways to play that or safer ways to play that are u.s. sectors that have exposure to, you know the international landscape, particularly europe.
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of europe is no different than what he were facing here a few years ago. they have come through a lot. there are still certainly headwinds. obviously gdp growth is an issue there. but from a pure valuation perspective they have weathered a pretty big storm. it is not something that we would look to go all-in on. if you're looking to alcoa kate particularly europe for the longer term. there are better values than we saw a few years ago. you want to start looking for values across the macro indices and sectors in particular. david: steven, larry, thanks. if you ever want to trade in options, it is a very dangerous market to trade in. sandra: not necessarily. david: you're risking a lot but the payoffs could be great too. listen to larry shover and listen to sandra as well. he has a book how to trade in options for times like these. sandra: options are meant to market less dangerous. >> that's true. but it can be a risky bet. you want to have help when you're doing that.
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larry shover has a book to help you threw it. thanks, guys. appreciate it. >> hewlett-packard leading the dow up 12%. coming up the executive vice president, hp's enterprise group telling us how the company's $35 billion server storage networking business is going to expand. they have a server that is the size of a small paper back book. incredible stuff. sandra: nice. getting dreamliner back in the air. really? representatives from boeing meeting with the faa to discuss a solution to the battery issues that have grounded these jets. we'll have the latest on that.
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sandra: 15 seconds to s&p future close in chicago. let's go to the dan in the pits of the cme. dan? >> we're not seeing a whole lot more action than what we saw at the 3:00 close but what i would look for next week is two things the italian election over the weekend and the sequestration issue. long term i'm not worried about sequestration if it happens.
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short-term the market will be a bit concerned. we might see a pullback off of that. sandra: dan, thank you very much. i will see you next week. david: that's right. sandy will be in chicago. shares of blackberry are falling. let's head back to nicole on the floor of the new york stock exchange for more information. why was it down? >> david, i'm looking at a research note from mkm partners, when you start to read this is terrible news for blackberry. take a look at the stock. it was down about 5%. they have downgraded blackberry to a sell, saying that there is 90% chance of the blackberry ten will flop. the shares could go to $7. they reduced price target to ten but it could go to $7. one of the reasons, they talk about the apps, there is lack of apps. another thing they talked about the u.k. z ten, which is comparable unit. sales there have stalled. there is unwillingness by the carriers, the carrier checks, suggest an unwillingness to carry heaventory of the blackberry ten. it is not doing that well
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over in the u.k. of course we know that it will be launched here later in the month ahead, however, of, mkm partners certainly giving a giving a cautionary tone on the new product we waited basically a year and a half for. in the meantime, i can tell you the stock has been a winner year-to-date. it is up 11%. certainly outpacing a name like apple down year-to-date. you can't compare them directly but at least for the year 2013 blackberry was the better investment. lot of cautiousness. david: i have a new blackberry, the keys are getting stuck. i don't like that. it could go down as much as 30%. thanks, nicole. sandra: representatives from boeing meeting today with the faa to propose a fix for the faulty batteries that grounded an entire fleet of dreamliners worldwide. david: this is a costly problem. so where do we stand on a fix. let's go to peter barnes for breaking news on this. >> that's right, david and sandra. a statement out by the faa
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after this meeting. it says quote, the faa is reviewing a boeing proposal and will analyze it closely. the safety of the flying public is our top priority and we won't allow the 787 to return to commercial service until we're confident that any proposed solution has addressed the battery failure risks. and this meeting happened this afternoon here in washington, about 90 minutes we're told. broke up at around 3:00 this afternoon. the meeting, included the commercial airplanes president at bowing, ray connor. faa administrator. the company says in a statement that it released that the meeting was productive and, quote, we are encouraged by the progress being made toward resolving the issue and returning the 787 to flight for our customers and passengers around the world. boeing and the faa offering no other details. the connor reportedly went in with a proposal for some new designs and safety
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features for the high-tech but faulty lithium-ion batteries. among other things the new engineering would reportedly add insulation to batteries to make sure they don't catch fire. the company has been testing a new design. but david and sandra, the big issue here how quickly the testing can get done, how much testing the faa wants the company to do, both on the ground and in the air, and there is some officials saying that they could get the dreamliners back in the air by april. the company telling "the wall street journal" this morning that they hope that they will be back in the air by mid-march. back to you. david: meanwhile the engineering union just rejected a pension deal. so they may have trouble on the union front as well. boeing with some problems, quickly. >> well there were two, two, yes. the engineers actually accepted it but the technicians rejected it, david. i was just reviewing that as we went over it. two separate bodies within that group. david: right. >> there is no strike
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imminent. david: they're threatening one anyway. >> they are threatening one and these negotiations continue. >> peter, thank you very much. >> you bet. david: do you have an old cell phone at home collecting dust? i have a couple of them. you're not alone. americans have $34 billion worth of the old gadgets at home. up next the ceo of a company that pays people hundreds of dollars for the phones. what do they do with them, particularly the old iphones? how might this affect apple. we ask gazelle's ceo and cofounder next that axiron is here. the only underarm treatment for low t. that's right, the one you apply to the underarm. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair oincreased acne in women may occur. report these signs and symptoms to your doctor if they occur.
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david: more than half of american consumers own at least two unused cell phones and the trait in value on the used gadgets is $34 billion. we have somebody that tapped into the gold mine and
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profiting off a multibillion-dollar industry. joining me is gazelle ceo president and cofounder. israel, good to see you. thanks for coming in. how is your business doing? >> thanks for having me on the show. business has been great. recommerce opportunity you hit is massive. it is all driven by the record pace of innovation that we've seen in mobile devices over the last few years. david: as it happens the director of this show, the guy who is directing the show right now, just sold to gazelle an old iphone 4 for 150 bucks is. is that about an average price people sell them for? >> for an iphone 4 you can get a 150 bucks. for s or you have grade to five, 200 dal, even more. david: wow! how do you make money? to whom do you sell the old iphones? >> you have to start with premise when you buy the new phone in the u.s., you pay about 2 to $300 to the carrier when you upgrade but the inherent value of the
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device is much higher than that. it is closer to 6 to $800. so when we pay you $200, a couple years after you used the., the intrinsic value of the device is much higher than that. there is plenty of demand, both in the u.s., but even more so in emerging markets for these devices. david: so, for example, do you sell them into mexico? do you sell them in asia? where is your biggest market for resale? >> we sell into a lot of different regions. i would say asia is the largest market that we sell into. as well as africa and latin america. if you think about demand for these phones over the next three years you're talking about two billion units that will be in demand in those markets. apple, samsung, black remember i, they can't make enough phones to satisfy demand. david: we've been hearing and apple's stock has shown this the last six months or a year, there is less of a
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demand and encroaching on market share apple used to have from iphones from samsung and android devices? do you notice the same thing? are there slackening in demand for old iphones? >> we're not seeing that at all. david: really? >> in terms of demand for used product it has grown substantially over the last year. our business currently growing about 100, to 100% year-over-year. so see manned -- demand is just massive for the product. david: that has to be good news for apple, right? >> well it's good news for apple despite they're not selling directly new to these consumers. if you think about it in those markets, those consumers otherwise can not afford to really buy a new iphone, in brazil, for example, it costs over $1000 to buy a new iphone. most people can't afford to buy new iphones. they're as happy to buy one, 1 1/2-year-old iphone from an apple perspective. they get into the apple ecosystem. they get on itunes and buy
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music, video, and gets the apple brand in front of the consumer that otherwise couldn't afford to buy apple. david: a how do you, what is your relationship with apple? we understand that you could be increasing their market share and the enthusiasm for iphones by what you do but do they tell you that directly? do you work with them directly any way or what? >> so there are two sides to our business. in the u.s. where we collect the device tros consumers and pay consumers for the devices the role that we play in the apple ecosystem is enabling the apple enthusiast to upgrade more frequently. when the iphone 5 came out in october, about a third of the product that we bought directly back from consumer were apple iphone 4ss. it is an incredible amount of upgrades that are happening a year after the 4s was introduced. we're seeing a lot of upgrades that the trade-ins are driving, i'm sure apple loves that. as far as the emerging markets, again we provide
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access to apple products in those markets to an audience that other wise would not have apple products in their hopes. david: net-net, this is good for apple. good for everybody. people selling the old phones. you, you're making money on it. israel, thanks for coming in. please stay in touch, all right. >> you're welcome. david: from gazelle. sandra: david, we keep hearing about pc sales on the decline. so what is hewlett-packard doing to strengthen its server, storage and networking business? find out after the break when the executive vice president happen's enterprise group joins us live. hpq a huge winning stock today by the way. we'll ask him about that. but first with a academy awards coming up this sunday, we know you have your parties planned we combined our passion for movies and business and asked some business leaders what movies they love, including microsoft chairman bill gates. so which musical is his favorite? is it the "sound of music", "mary poppins" or is it "west side story"? the answer in 2 1/2 minutes.
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how do traders using technical anysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spotkeys and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innotive reason serious investors are choosing fidelity. now get 200 free trades when you open an account. sandra: time's up, which musical is bill gates's favorite movie? well the music playing of course says it all. it is the academy award winner the sound of music. he told fox business that years ago he and his wife bonded while watching the film back when they were dating, david. how sweet.
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david: yeah. i guess that is one word for it. maybe saccharin. time for today's speed read, if we could kill julianne druce. the picks sill costs 1299 for a wi-fi only version. and 1499 for its wireless technology version. gm, general motors, spending $7.3 billion to expand in south korea over the next five years. the auto giant plans to boost manufacturing facilities and double the size of its design centers. >> the european commission warning the eurozone will not return to growth until next year, reversing a prediction to the end of recession this year. the e.u. is blaming bank lending and high unemployment for delay in. toyota has the minivan at the geneva minivan. the ecosports suv is being
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built for european markets. smithfield packing is recalling pork sausage in 11 states. the products may contain a small piece of plastic that is today's speed read. [buzzer] sandra: time to share. shares of hp skyrocketing following better-than-expected earnings after the bell yesterday. even though hp beat on earnings, revenue did fall in all of its main business divisions, dave. david: the one bright spot, the company's enterprise group networking decision saw revenue increase by 6%. will the enterprise new server technology help hp pull ahead of competition? joining us david donatelli, hp enterprise group executive vice president. david, first of all congratulations on the market news today. it is a good happy friday with a 12% gain in the market share. but i just want to focus, go directly into a product which is fascinating with a lot of people, your new server. it is oriented under the
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name project moon shoot, which sounds frankly like a james bond novel. but you take a server is what, 10% of the size of normal servers, operates much faster with much lower energy. i think you got a sample that you can show us. tell us about it. if we take down the details and actually see the server itself. >> that's correct, david. the hp led market for industry standard servers for more than 15 years. those are built on large-scale intel chips. our new server moon shot are built on chips in the smartphones. these are intel adam chips or arm chips. they move servers forward to enable social media sites and big web sites people like to use every day. in my hand are four servers. this compares to the rack you see of industry standard servers. in the power of computing here is i can do in one rack of moon shoot, what it takes ten racks of traditional
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industry standard servers to do. sandra: when will you start shipping? >> we have prototypes out with our customers today. and then starting in april our second generation of this product will be shipping general availability. david: now, is it helping the bottom line? i know your networking division has done very well. you had an increase what, four to 6% in the networking division? >> that's correct. david: the storage and server division, correct me if i'm wrong, hasn't done as well. why not? >> what we're seeing here a big transition in the marketplace. so in storage as an example we're moving to hp-based ip, meaning products we develop ourselves, for what we call the new world of convergence where enterprise infrastructure is heading. for instance there is product called 3-par you see right over my shoulder. that grew more than 21% year-over-year. so in our new technology thas we're introducing we're seeing great rapid growth. that is being challenged by some decline in traditional products. david: like what, for
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example, forgive me for focus on the negative but like what do you have in trouble, david? >> traditional tape where people back up tape and versus rotating media. people use disks and solid state media for backups. sandra: a lot of people look at the stock and looking at the moon shot thinking things look good. best performer in the dow so far this year. the stock is up 14%, but, david, on a year-over-year basis your stock is dill down 35%. there is argument whether or not you guys are in full recovery mode. is the moon shot the answer here? are you in a recovery? are we going to see this big turnaround from hewlett-packard that everybody is wanting? >> yeah, i brief you will see the turnaround from hewlett-packard. what we said for fiscal 13 was really a fix and rebuild year. we're happy today we beat earnings rather significantly. our cash flow increased over 400%. but most importantly products are what are going to lead our comeback.
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we introduced in q1 new products in printing, new products in pc's and tablets and a whole host of new enterprise products one of which is moon shot we spoke about. the strength of those products and service thas go with them that will drive the recovery of our revenue growth going forward. david: david, why not break up the company? i know that is a dirty word around hp, but really focus in, maybe the moon shot is what does it. i'm sure the pc market is not the strongest part of hp right now. why not actually break up, get rid of those units that are not performing well? >> because what our customers continuously tell us they want an end to end solution. hp is one of the few companies in the world that can deliver that. as the world converges. meaning you use the mobile device to connect to some products i make here, it is an advantage to engineer those from end to end. an advantage to have a supply chain from end to end. this week we had 2000 top
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resellers in las vegas at our annual global partner conference. to a person they said they want to sell an end to end solution from hp. they do not want to see the company broken up. those partners account for more than 2/3 of our revenue. our partners and customers tell us they want end to end from hp and it is up to us to continue to execute along those lines. sandra: david donatelli, good luck on moon shot. david: hold the server. of 89% less power and 94% less physical space than the other servers. this really is a remarkable break through. david, thanks a lot. sandra: actually smaller than your book. david: it is smaller than a paper back. when it comes to real estate investing should you look to shopping centers or the entertainment industry? coming up next where a leading real estate money manager is turning for profit. sandra: still no budget deal and the clock is ticking away to automatic spending cuts that could switch our recovery from slow to reverse. we'll head to the
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♪ starting at $37,800. ♪ >> i'm sandra submit with your fox business brief. it was a bullish day on wall street but today's rally not enough to recover from the losses earlier this week. the s&p 500 snapping seven straight weeks of gains, the longest winning streak in more than two years. the "wall street journal" reporting that cme group is rejecting a possible five million settlement with u.s. regulators over charges that two of its former employees leaked information on customers trades. the commodities futures trading commission charged cme and the former employees yesterday with allegedly revealing details of customers trading activities to a commodities broker. andy warhol fans will soon get a chance to bid on his artwork in a week long cyber sale. the global auction from
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february 26th to march 5th include 125 paintings, draws and photographs. that is the latest from the fox business network, giving you the power to prosper. you co. ♪ ♪ or just go to e-trade and save it. boom. ♪
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david: we're getting news here, breaking news from moody's of a downgrade of a country. the united kingdom's government bonds have been downgraded a aa-1 by moody's to a aaa. that is one shot downgrade. excuse me to, to aa-1 forgive me from aaa to aa-1. it is a one should have shot downgrade for the u.k. government bonds. this is from moody's. we'll see whether the other ratings agencies follow suit. moody's downgrading u.k. government bonds one shot. we'll give you more information as we get it on fbn. sandra: real estate market has been a bright spot for investors in the last few quarters or so with a mild recovery in the sector but this week we saw mixed data
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coming out from home builders leaving some investors slightly optimistic, david. david: will housing continue to climb this year or is this the end of the rally? joining us steve brown, american century investments senior vice president. steven you claw your way back up and fall. it must be so discouraging to see when there is bad news. overall question about reits, whether or not they have sort of shaken off the stigma of the subprime debacle? do you think that's happened or do people still have that in their minds? >> i think they have shaken it off from a performance perspective because they have put up good returns for the last couple years. what people have seen commercial real estate has been in recovery for last couple years. housing as you mentioned at top has bottomed out in fourth quarter of 2011. it is just coming out of the worst housing market frankly since 1937. there are still questions about the housing market recovery. in terms of commercial real estate reits they are performing real well. sandra: are you recommending going to the commercial reit
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space but are you also strong on the residential? >> we have a reit fund but we own homebuilders in the fund because we think housing fundamentals boughted second half of 11 and we're in 2nd inning of three-to-five year recovery in housing. we think home prices could appreciate six to 8% in the united states this year. david: of course not all commercial real estate is the same. you have commercial real estate in manhattan and have malls outside of manhattan. you have things like the apple stores. i know you're not too big on apple stores right now, are you? >> well we've what seen is apple stores are a huge home run whether in midtown new york or top regional mall. sometimes they can do 6,000 to 8,000 a square foot and sells where huge mall can hit 8,000. david: but? >> what happened, the not a lot of new product launches coming out and massive current sales. it will be hard to have double-digit comp store sales for apple stores in 2013. instead of having sales growth of 15 to 20% in 2013
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maybe they're flat but that will have negative impact on overall comp store sales. david: the pace is slowing? >> that's right. sandra: i want to point out that the reits index delivered more than 20% in 2012. looking into 2013, do you see as robust growth coming from the that space? >> what we see this year is we've got, lun, very good commercial real estate fundamentals in the united states. we have demand versus supply. we have constructive lending environment. environment is pretty good. rates are lower but lenders are back lending again. reit haves good dividend. that is.4% growth. sandra: that is hot right now. >> when we think what will work in 2013 i think receipts will have good performance -- reits and we believe they can deliver 8 t0 10% total return on clients based on income and capital appreciation based on rising rents. david: the jobs picture is still lousy, no matter how you cut it, 7.9% unemployment is bad. if that improves and i don't
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see particular signs it will improve dramatically, if it does would that be a huge boon to the reits? >> if we had job growth of 175,000 a month or so in 2013 that would be a boon for the economy. it would be a boon for. david: just, because that is not a lot more than what we have -- >> that would be a nice solid pace. that would be good for the economy. that would be good for stocks. it would be good for reits. demand is growing in the u.s. at higher than expected pace. we would be pretty excited about that. sandra: we only have a few seconds you don't like manhattan's market even though it has been thriving. we've been reporting on that. >> what we said is new york real estate has been very strong. new york is one of the first areas of country to recover because the fed cut rates, financials took off. sandra: yeah. >> what happened is the rate of economic improvement is new york started to slow down where other parts of the like energy belt from denver to houston is really ripping right now. just that new york is not the most exciting economic story in the country right now. other parts of the u.s. are. the energy belt.
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actually areas where there are home building booming going on in the southeast. the condo market in new york is really strong but that is not really a reit product. sandra: gotcha. there are the geographic picks from colorado to southern california and texas. david: good stuff. sandra: thank you, steve brown, for joining us. david: thanks a lot. sandra: we're getting dangerously close to the automatic cuts going into effect, cuts that could hurt our economy. is there any hope of a budget deal being made in time? we'll head out to the white house for the very latest on that. david: all that historical shouting from inside the beltway. time for more academy awards showbusiness trivia. which movie changed the life of dow chemical chairman and ceo, andrew liveris. was it "weird science"? the graduate, or "a beautiful mind"? that is a my guess. i don't really know. the answer when we come back. ♪ .
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david: which movie changed the life of dow chemical chairman and ceo, andrew liveris. the one that featured this song, you hear that? simon and garfunkel, the graduate. liveris he loves the part of the movie where a man pulls dustin hoffman aside and said have one word for you,
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plastics. there is a great future in plastics. abs like andrew liveris went into the future in plastics. sandra: you were wrong by the way. david: i was wrong. i was wrong. i remember what the best picture was in '68, "a man for all seasons". sandra: that is very good. one week to go until the $85 billion mandated spending federal cuts kick in and there doesn't seem to be any hurried negotiations between the two parties. david: not at all. what if anything can we expect from d.c. with seven days to go? fox business's rich edson joins us live outside the white house where there is a lot of hysterics right now how the world is going to end if we cut $85 billion out of a 3.8 trillion dollar budget, right, rich? >> not much in the way of discussion or negotiation to figure out how to fill in those cuts. president obama, the administration, discussing all week with cabinet secretaries the dire economic circumstance that will occur if these automatic spending cuts go into place in a week. earlier today, the
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transportation secretary, ray lahood, came out and said, we're looking at faa furloughs that would lead to flight delays. that would lead to possibly flight cancellations. earlier this week it was agricultural secretary tom vilsack discussing how meat inspectors would be furloughed, putting food safety into questions. this comes up as a way to pressure republicans to agree to tax increases as part of a plan to replace the automatic spending cuts. earlier today president obama had another push. >> i've been very clear that these kinds of arbitrary, automatic cuts, would have an adverse impact on families, on teachers, on parents who are reliant on head start programs, on our military readiness, on mental health services, on medical research. this is not a smart way for us to reduce the deficit.
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>> some republicans suggested that the administration is choosing high-profile cuts over practical ones to make a political point. in a letter, congressman duncan hunter writes, i was frustrated to learn changes recently announced by services would cut deep into operations funding. while programs that should be reduced or eliminated are protected. there is is questions about second aircraft carrier redeployed to the gulf in the middle east. the navy responded to that. say postponing the deployment of truman strike group was right decision, though a tough decision to make, we've been very honest about the negative impacts of improper funding and sequestration. a number of these agencies say they have got no other choice but to cut the issues because the law that requires these cuts, does not give the flexibility that these agencies need to go from one area to the next, moving money around. it says basically all accounts have to be cut by a specific number about. back to you. sandra: march 1st is quickly approaching, rich edson. david: we have to keep in
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mind with all of these cuts the federal government will still spend $15 billion more in 2013 than it did in 2012. this word cuts is relative to the beltway. we talk about this on for example on fox tomorrow on the fox news channel at 11:00 a.m. thank you, rich. >> thanks. david: some people left a california hooters with a lot more than wings. what could that possibly be? i don't know. we'll tell you, when we go "off the desk" in the next segment. sandra: i'm glad you read that, not me. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. rify and lock. command is locked.
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five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. we asked total strange to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally.
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